Insights on Wealth Creation Strategies and DNA of Success
Explore key factors for wealth creation, including management quality, market positioning, growth potential, and more. Unveil the DNA of both wealth creators and destroyers, along with the forces driving wealth creation. Discover essential principles for sustainable success in the world of finance.
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MOSL Wealth Creation Study Summary Subash Nayak http://art-of-mental-modelling.blogspot.in/
Outstanding management Unquestionable Integrity Focused on core business First generation entrepreneur Favorable Tailwind Huge size of Opportunity ROE/ROCE > 20% Growth > 25% Management Quality Macro Wealth Creation Valuation Business Not in commodity business Non cyclical High entry barrier business Leadership market position (1st or 2nd) Low capital Intensity PEG < 1 Payback ratio < 1
DNA of an Wealth Creator - 1 Business o o o o Management o Outstanding management o Unquestionable Integrity o Focused on core business o First generation entrepreneur Not in commodity business Non cyclical High entry barrier business Leadership market position (1st or 2nd) Low capital Intensity o Macro o Favorable Tailwind o Huge size of Opportunity Valuation o PEG < 1 o Payback ratio < 2 Size High ROE/ROCE Sustained earning growth (>25%) o Preferably Midcap
DNA of an Wealth Destroyer Commodity Business Manufacturing of intermediate products Low ROE
DNA of an Wealth Creator - snippets 1999 2000
DNA of an Wealth Creator - snippets 2004 2004
DNA of an Wealth Creator - snippets 2005 2006
DNA of an Wealth Creator - snippets 2007 2008 2010 2009
DNA of an Wealth Creator - snippets 2010 2012
5 forces of Wealth Creation 1. High ROE 2. Increasing CE 3. Growth 4. Cost of Capital 5. Margin of Safety
Valuation and Growth Non cyclical Secular Growth Consistency of Growth How much capital needed for Growth Longevity of Earning Valuation Profitable Growth (FCF gen capability) Sustainability of Growth
Winning Investment Winning Investment o Winner Category Sector growing 1.5x of GDP o Category Winner Moat + Growth + Management o Reasonable Valuation
Phases of Commodity Cycle
